Question

Telstar Communications is going to purchase an asset for $380,000 that will produce $180,000 per year for the next four years in earnings before depreciation and taxes. The asset will be depreciated using the three-year MACRS depreciation schedule in Table 12-12. (This represents four years of depreciation based on the half-year convention.) The firm is in a 35 percent tax bracket. Fill in the schedule below for the next four years.
Earnings before depreciation and taxes _____
Depreciation _____
Earnings before taxes _____
Taxes _____
Earnings after taxes _____
+ Depreciation _____
Cash flow _____



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  • CreatedOctober 14, 2014
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